A “checkmate” move to disprove the “prophecies” that in 2032 the Greek economy will fall into debt hibernation and collapse is being prepared for 2025 by the economic team. The government is changing tactics and proceeding with strategically significant early repayments of expensive bailout debt, specifically targeting loan installments maturing between 2033 and 2042. Essentially, it is settling the country’s public debt for the next 20-30 years, aiming to eliminate even the last shadows that still weigh on it.

Despite the praise from international organizations and foreign press for the performance of the Greek economy and the rapid reduction of debt, the Ministry of National Economy and Finance is acting proactively to dispel (starting in 2025) any concerns or fears cultivated in public opinion—mainly domestically and for reasons of political exploitation or sensationalism—that “something bad” will happen in Greece in 2032.

What changes in 2025: Since 2019, and despite successive crises, Greece is the only country that not only pays off its current debts every year but also prepays future debts. In five years, it prepaid “extra” installments for future years amounting to €24 billion! Ahead of schedule, it has so far extinguished €15.9 billion in debts to European creditors for the years up to 2028. At the same time, it prepaid and fully paid off the IMF by 2023, prepaying an additional €8.17 billion in 2019, 2020, and 2022. If the global crisis of 2020-2021, which temporarily at least disrupted plans, had not occurred, the public debt might have been reduced even faster.

From 2025, this tactic changes. Instead of continuing to pay off debts of upcoming years (e.g., 2029 to 2032) in sequence, €5 billion will be allocated to reduce payment obligations for the years 2033 to 2042 by 7-10 years earlier. That is precisely the time when a “debt bomb” of €25 billion, as many fear or predict, will explode.

By prepaying debts that were due after 2032, the government clears the horizon and strengthens investor confidence in the country’s economic future for the coming decades. Not only through the prospect of growth leading to a faster decline in debt-to-GDP ratio but, even more tangibly, by putting “money upfront” that neutralizes entirely, as of now, any burden or pressures that might arise after 2032 due to deferred bailout obligations spanning two decades.

After 2032, what? Today, Greece’s public debt is decreasing and considered extremely well-structured, with fixed interest rates and an average debt maturity depth of 19 years, compared to 7 to 10 years at most for Italy, Spain, and Ireland. Analysts and ordinary citizens, however, worry that everything could change after December 31, 2032. Scenarios are fueled by uncertainty or ignorance about what exactly will happen eight years from now when, in addition to the current debts the country pays off annually, additional payment requirements of €23.5-25 billion (or nearly 10% of GDP!) for bailout loan principal and interest from the Greek Loan Facility (GLF), which will “unfreeze” and must be paid from 2033 onward, will also re-emerge.

This is because the 20-year grace period granted to Greece (suspension of installment payments for 2013-2022) as a debt relief measure, extending loans by “10 + 10 years” based on two Eurogroup decisions in 2012 and 2018, ends then. This leads many to worry about what will happen after 2032 when payments for installments from two decades earlier resume.

However, they overlook important facts stemming from Eurogroup, ESM, and Eurostat decisions, which establish the following:

■ Markets are aware: The €23.5 billion deferred obligations for 2033 have already been accounted for in the official recording of Greek debt per year by Eurostat. Hence, it is not “unknown debt,” but known to markets, which price it accordingly. Unsurprisingly, interest rates on the 10-year Greek bond maturing on June 15, 2033, are today lower or nearly the same as those of countries like Italy, France, Spain, and Croatia. This demonstrates that there is no fear among investors of a “shock” due to a sudden increase in Greek debt on January 1, 2033. Furthermore, in its presentations to international investors, the Greek Public Debt Management Agency consistently includes even worse-case scenarios, estimating deferred obligations after 2032 to reach €25 billion instead of the €23.5 billion international organizations forecast.

■ Payment until 2052… and beyond: While 2033 may indeed mark the first year of repayment of deferred installments from 2013 onward, it will not be the only one. The €25 billion debt increase will not occur all at once in 2033, nor will its repayment. The Eurogroup’s 2018 decisions stipulate that principal and interest (installments) will be repaid over decades. They note that the maximum weighted average maturity (WAM) of this debt’s repayment will be 20 years. Although it is unclear when payments will start and how much each installment will be, the final payment must not be made later than 2070 (a maximum of 42.5 years after 2018)!

The EFSF has not yet determined the payment schedule or the amount of each installment. But based on the above, the worst-case scenario for the country would be to repay the 2013 installment in 2033, the 2014 installment in 2034, and (20 years later) the 2032 installment in 2052. Despite the uncertainty about what and when repayments will begin or end, it is clear that whenever the €25 billion repayment starts or finishes, it will be spread over two decades, burdening the country by €1-1.5 billion annually.

■ Greece is not alone: To dispel all concerns, the 2018 Eurogroup decision committed to providing Greece with further assistance in 2032 if deemed necessary. Thus, the country is highly unlikely to crash suddenly if circumstances or prospects in 2032 are negative.

Nevertheless, any lingering fears or shadows will be dispelled in 2025 for three key reasons:

1. 1. The budget can bear it: A €1-1.5 billion annual burden does not pose a risk for Greece. The country already pays €7-8 billion annually for current obligations while voluntarily paying an additional €8 billion (as with the early repayment on December 13) to reduce its future debts faster. This means it comfortably spends €15-16 billion annually while maintaining cash reserves exceeding €32 billion (nearly 15% of GDP), prepaying future debts like no other country does. Furthermore, after 2025-2026, Greece is expected to eliminate deficits and additional borrowing needs, unlike other countries that generate deficits by paying only current obligations.
2. 2. Debt decreases instead of increasing: Starting in 2025, by specifically prepaying debts for 2033-2042, the government ensures today that payment obligations for those years are reduced by approximately €1.5-2 billion annually with the initial €5 billion allocation. Essentially, it will reduce almost proportionally or even more (in euros) any burden arising from deferred loans for each year after 2032.
3. 3. GDP of €400 billion “absorbs” the burden: The fiscal effort required to meet the annual €1-1.5 billion burden will seem even smaller during the critical period of 2033 to 2052 (or later if repayments extend to 2070) compared to today. However, this is contingent upon continued economic growth, as has been the case so far with only a few European countries.

According to Greece’s Medium-Term Fiscal Strategy 2025-2028 (one of just eight national plans recently approved by the European Commission), the country’s GDP is projected to grow from €232 billion in 2024 to €272 billion in 2028. With annual growth of €10 billion, Greece’s GDP will exceed €320 billion by 2033, €400 billion by 2042, and possibly €500 billion by 2052 or later. The fiscal “burden” of finding €1-1.5 billion annually will seem nearly 40%-50% smaller compared to current economic figures. This discussion will naturally become irrelevant, provided no fundamental economic upheavals occur.